Georgian President Mikheil Saakashvili is a happy man. Yesterday U.S. President Barack Obama bestowed upon him the privilege of a high-profile visit to the Oval Office. The Obama Administration was rewarding Georgia for its support in Iraq and Afghanistan. Georgia also won points for a recent gesture that has helped to defuse tensions with Russia. (Which perhaps explains why Obama confused the two at one point.)
Today Saakhashvili made an appearance at the World Bank's Washington headquarters. The Bank used the occasion to issue a highly complimentary report on Georgia's anti-corruption campaign. When I caught up with President Saakashvili there, he boasted that Obama had singled out Georgia for its recent efforts to improve governance. "He also was talking about Georgia as a role model for reforms for the whole region," Saakhashvili said.
There's something to that. Anyone who wants tips on tackling sleaze should take a look at the World Bank study. Georgia has made some impressive progress.
Soon after coming to power after the Rose Revolution of 2003, Saakashvili's government decided to demonstrate its commitment to fighting bribery through a dramatic gesture. One of the peskiest forms of corruption plaguing ordinary Georgians at the time involved the notoriously rapacious traffic police, who made a habit of topping up their meager salaries through a variety of petty shakedowns. Overnight Saakashvili fired the whole force of 16,000, replacing it with a much smaller group of carefully vetted, better-paid police. The reform was backed up by spot checks and other measures to ensure that new recruits stuck by the rule of law. Fines were no longer collected at the scene of the misdemeanor but paid at commercial banks. A 24-hour hotline was set up for citizen complaints about law enforcement.
The measures dried up graft in the police force and smoothed the way for a drastic decline in overall crime. The police reform included measures for cutting the red tape involved in issuing driver's licenses and car registrations. The government set up a series of one-stop shops to streamline applications and prevent artificial delays. Among its other positive effects, that move had the unexpected side-effect of transforming Georgia into a regional hub for the lucrative trade in used cars.
The government didn't stop there. It also embarked on a radical simplification of the tax code that dramatically improved collection while broadening the tax base. Electronic filing options for businesses boosted the transparency and efficiency of the whole process. Similar reforms were applied to the customs service, to university entrance exams, and the municipal bureaucracy.
One of the most dramatic reforms involved the energy sector. By 2000, power generation in Georgia had fallen to half of its 1990 levels. Georgians had become accustomed to rolling power cuts - a result of years of financial mismanagement and ubiquitous corruption. Utility companies and the public officials associated with them charged bribes in exchange for providing reliable electricity.